The post Why Is Ether Down Today? Market Fears and Growing Supply Help Fuel 5% Slide appeared on BitcoinEthereumNews.com.

Ether (ETH) has fallen more than 5.1% over the past 24-hour period to below $2,600, while bitcoin (BTC) is down around 2.9% over the same period to $95,700. The largest altcoin’s price performance has pushed down the CoinDesk 20 Index by nearly 4% over the period amid a market downturn that also affected equities markets over U.S. President Donald Trump announcing plans to unveil reciprocal tariffs next week, escalating fears of a trade war with the country’s major trading partners. Yet ether’s underperformance comes amid other factors influencing the cryptocurrency specifically, including its circulating supply having recently risen past pre-Merge levels. The Ethereum Merge—the network’s merge with the Beacon Chain that moved it to a Proof-of-Stake (PoS) consensus mechanism—was widely expected to help its supply drop, and it did so for months. The trend, however, reversed in April, weeks after the activation of the highly anticipated “Dencun” upgrade. This upgrade suppressed the growth of layer-2 networks by reducing their data fees and introduced transaction “blobs,” which helped reduce transaction fees. Reducing transaction fees on Ethereum has meant that less ether is burned, which in turn reversed the cryptocurrency’s supply trend. Since the introduction of EIP-1559 in 2021, every ether transaction has a base fee that gets burned, helping reduce the supply of ETH. The reduction in burned ether has seen ETH’s supply grow over the last few months to the point its circulating supply has grown by 8,242 ETH since the Merge, data from Ultrasound.money shows. Ether’s supply growth. (Ultrasound.money) Ether also saw the Securities and Exchange Commission (SEC) recently delay its decision on listing options contracts for BlackRock’s iShares Ethereum Trust (ETHA), which could also be weighing on the cryptocurrency’s performance. Other factors, including a restriction of the Ethereum Foundation and heightened competition from other networks, including Solana, have…

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Filed under: News - @ February 8, 2025 4:19 pm